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UPbit, South Korea’s biggest cryptocurrency exchange, was investigated by local police and 10 investigators after its headquarters in Seoul were raided. Chosun, the country’s biggest mainstream media outlet, reported that the South Korean authorities are suspecting UPbit of illicitly moving customer funds to the account of its executives.

Investigation Ongoing

On May 10, the Seoul local police and 10 investigators from the Korean Financial Intelligence Unit (KIU) and Korean Financial Services Commission (FSC) raided the headquarters of UPbit and seized their offices to conduct an official investigation into the suspicious movement of funds from the UPbit cryptocurrency exchange to the personal accounts of UPbit executives.

Chosun along with other mainstream news networks including Hani reported that the South Korean police is extensively investigating allegations of fraud and the illicit movement of funds from client wallets.

The general reaction from the cryptocurrency community in South Korea and the global cryptocurrency space has been that UPBit executives should not have had the motivation to commit such crimes given that cryptocurrency exchanges have generated hundreds of millions of dollars in profits on a quarterly basis since early 2017.

UPbit, South Korea’s largest cryptocurrency exchange, has been raided by local police.

The investigation into UPbit is still ongoing and the local police is yet to release its finalized report on the situation. But, as it did with Coinnest, if the South Korean authorities discover clear evidence in the movement of client funds to external accounts, it could result in the exchange either permanently or temporarily shutting down.

“We have secured hard disks and accounting books through confiscation. Analysis is expected to take days,” the authorities said, adding that the final report on the UPbit case will be released next week.

Meanwhile, the exchange operator’s development team stated that the platform is still operational and will continue to service users until further notice is sent by the local police.

“UPbit is currently under investigation by the prosecution, and we are working diligently. UPbit services such as all transactions and withdrawals are operating normally. Your assets are kept securely in your account, so you can rest assured that you can use UPbit services.”

Coinnest Situation

Last month, the president of Coinnest, formerly a major cryptocurrency exchange in South Korea, was arrested for allegedly stealing user funds and allocating them to his own personal cryptocurrency accounts. According to Hani, Coinnest was once the third biggest cryptocurrency exchange in South Korea, which also operated a major cryptocurrency mining operation.

Local police and investigators discovered that the funds of clients were sent to the personal accounts of executives at Coinnest and immediately arrested its president.

Coinnest is still functioning, after its board announced that it has replaced the executive team of the company and will continue to operate as a local cryptocurrency trading platform.

Overall, the cryptocurrency market’s reaction to the investigation into UPbit could be considered as an exaggeration to an ongoing investigation and investors on the trading platform are still able to trade and withdraw their funds. But, analysts have stated that the case has led the cryptocurrency market to decline by large margins over the past 12 hours.